Asian Stocks Decline Following Wall Street’s Recent Weakness
Asian markets are feeling the heat as Wall Street’s tech sector struggles, leading to a cautious trading day.
Asian Stocks, Wall Street, Technology, China, US Economy
Tokyo: Asian shares are taking a hit today, wrapping up the year on a down note. Wall Street’s tech sector has been struggling, and it’s dragging down markets here too.
In Australia, stocks dipped about 0.7% in early trading. Futures are also looking gloomy for Hong Kong. It seems like regional equities are set for their first quarterly loss this year. US contracts are also slipping in Asia after the S&P 500 and Nasdaq 100 both fell.
The Bloomberg Dollar Spot Index is holding steady, on track for its best year since 2015. Many Asian markets are either closed or only open for a half day today, and Japan is closed until January 6.
Investors are feeling a bit uneasy, especially with Wall Street’s rally this year being mostly fueled by a handful of big tech companies. There are also worries about what 2025 might bring, with everything from President-elect Trump’s policies to the Federal Reserve’s plans and China’s economic health on their minds.
Noel Dixon, a senior macro strategist at State Street Corp., mentioned that investors are in a “wait-and-see” mode. They’re unsure how the Fed will respond to potential tariffs and what the fallout might be.
Today, all eyes are on the release of a key report about China’s factory activity. It’s expected to show that the economic recovery there is still pretty shaky, despite some stronger stimulus efforts and a boost from exports.
In other news, tensions between Beijing and Washington are still high. The US Treasury Department reported a hack by a Chinese state-sponsored actor through a third-party service.
Back in the US, Treasuries saw a rally after some unexpected data showed a decline in the Chicago Purchasing Managers’ Index. Plus, pending home sales in the US have been on the rise for four months straight, hitting their highest level since early 2023.
As for oil, it’s looking at a small annual loss after being stuck in a narrow trading range for months. The market is bracing for a potentially bumpy year ahead.
This week is packed with key events, including China’s manufacturing PMI and US construction spending data, so there’s plenty to keep an eye on.
In the stock market, S&P 500 futures dipped 0.1%, while Hang Seng futures fell 0.2%. Australia’s S&P/ASX 200 dropped 0.5%.
On the currency front, the Bloomberg Dollar Spot Index rose slightly, while the euro stayed steady. The Japanese yen fell a bit against the dollar, and the offshore yuan remained unchanged.
In the world of cryptocurrencies, Bitcoin saw a small rise, while Ether also gained a bit.
This story was put together with help from Bloomberg Automation.